USAID official says RP needs to spend more for infrastructure

The Philippine government faces certain challenges that need to be addressed if it hopes to get a more enthusiastic response from international funding agencies, the head of the local unit of the United States Agency for International Development (USAID) said yesterday.

One such challenge is to allocate more funds to infrastructure, said USAID mission director Jon D. Lindborg.

Speaking at the Second National Government Infrastructure Forum, Lindborg said the mere submission of a "wish list" for funding is not likely to be received with enthusiasm by prospective donors.

"We heard it all before. You gave us a list and promised to do it, but nothing happened."

Lindborg was reacting to presentations made by Agriculture Secretary Arthur Yap, Tourism Secretary Joseph H. Durano, Secretary Edgardo D. Pamintuan of the Subic-Clark Alliance for Development (SCAD) and Presidential Advisor on Mindanao Development Jesus G. Dureza.

The USAID official noted that the foreign donor community has grown weary over repeated appeals by the Philippine government for funds to support its various infrastructure projects.

He pointed out that just as in the World Bank-sponsored Economic Development Forum held in Cebu just last March, "challenges remain" that the Philippine government has to address.

First and foremost, Lindborg pointed out, is the inadequate budget provided by the Philippine government for infrastructure which is a mere five percent of the gross national product (GNP).

Lindborg also noted the inefficient prioritization of existing infrastructure projects; lack of public sector coordination and planning; the so-called "regulatory capture"; bureaucracy in business and the sanctity of contracts.

Lindborg cited the Ninoy Aquino International Airport Terminal 3 as the "poster child" of the Philippines’s infrastructure problem and a symbol "of what could go wrong here."

Philippine Chamber of Commerce and Industry chairman emeritus Donald Dee also expressed the private sector’s frustration in participating in government infrastructure projects considering the legal entanglements and the lack of capacity of implementing agencies.

Economist Peter Wallace echoed Lindborg’s concern about the inadequate government allocation for infrastructure expenditures suggesting that the allocation should be closer to eight to 10 percent of GNP.

Wallace was also concerned that the congressional cut of the 2007 budget and the projected government revenue shortfall this year of P6 billion would only aggravate the matter.

Wallace, along with the American Chamber of Commerce director John Forbes, also cited the lack of sanctity of contracts, again citing the NAIA Terminal 3 case.

Local economist Washington Sycip took exception to repeated calls for transparency, pointing out that while the Philippines is accused of corruption and is constantly pushed for more transparency, Malaysia also practices its own form of granting government projects and requiring instead contributions to its major political party.

Sycip argued that "each country has its own way of doing things."

In fact, Sycip appeared to espouse a "strong arm tactic" in getting things done more efficiently. He noted that "Malaysia can award (contracts) without any bidding and has excellent highways, while we have bidding but we have lousy highways."

He also recalled that the creation of the Baguio Export Processing Zone to initially get Texas Instrument’s investment 28 years ago was facilitated by the issuance of an Executive Order by President Marcos during the Martial Law years.

Despite the criticism, Sycip stressed the belief that infrastructure development is still the best way to address the country’s poverty problem.